University of Botswana Law Journal - PULP

3
ARTICLES
Foreign aid, the rule of law, and economic development in
Africa
ABSTRACT
N.A. Curott*
Foreign aid has failed to bring about any significant development results in the
poor countries of Africa in over sixty years of existence. The failure of aid is
due to the fact that development planning faces an insurmountable calculation
problem. Attempting to salvage aid by making it more selective does not
address this problem, and will not make aid effective. Aid by its very nature
causes waste, corruption, politicization, privilege seeking, and statism, all of
which are detrimental to economic development. Instead of relying on aid,
African economies should occupy themselves with creating legal institutions
that are commensurate with the protection of private property and the Rule of
Law, which are foremost among the institutions necessary for sustainable, long
run economic growth.
1. INTRODUCTION
In the sixty years since its inception, foreign aid has failed to bring about any
significant economic development in the poor countries of Africa. This fact has
caused many analysts to criticize the internal workings of foreign aid
administration in recent years, but they rarely question the actual potential of
foreign aid to lift poor countries out of poverty. Instead, the political
establishment calls for ever more aid: The United Nations recommended in
January of 2005 that the total amount of aid to Africa should be doubled by
2010, 1 while Official Development Assistance from the U.S. to Africa has
tripled since President Bush took office in 2001, 2 and it is likely that the new
Millennium Challenge Account will increase cash grants to poor African
countries. British Prime Minister Tony Blair has recently been a leading
champion of foreign aid and debt forgiveness, and advocates doubling aid to
Africa. The strategy of the IMF and the World Bank for development also
includes increasing the flow of aid to developing countries. 3 It is widely
* Mercatus Center at George Mason University, 4400 University Drive, Fairfax, VA U.S.
ncurott@gmu.edu.
1 UN Millennium Project, Investing in Development: A Practical Plan to Achieve the Millennium
Development Goals (New York: United Nations Development Programme, 2005).
2 International Development Statistics, http://oecd.org.
3 Global Monitoring Report 2006: Millennium Development Goals: Strengthening Mutual Accountability,
Aid, Trade, and Governance (World Bank Publications, 2006).